As an Eastern European with some experience with autocratic government I quite look up to the U.S. as to a champion of democratic culture, but among two major things that baffle me (healthcare being the other) is why there is such a high cost associated with litigation even for the innocent party. In continental Europe, the "loser pays" principle seems to hold quite well, while also having the benefit of discouraging people from frivolous lawsuits.
Imagine suing General Motors because of a faulty car. General Motors hires an army of experts and the best attorneys. In the event of loser pays, the apparent victim is now on the hook for perhaps a million dollars. That would shut down all legitimate product liability lawsuits in an instant.
There is a game-theoretic optimal solution to this:
The loser must pay up to the amount they themselves spent on prosecuting the case, but no more.
So General Motors would have to pay the full cost of the plaintiff's litigation if they lost, while the plaintiff would have to pay their costs, plus an equivalent amount to GM.
This is of course independent of compensation and damages awarded.
Which is why there is a definition of reasonable costs, and that's what you get reimbursed.
And if that is a million dollars, in that case: Should someone be able to cause a million dollars' worth of damage with a frivolous lawsuit without being liable for it?
Patent trolls are one of the things that would work significantly less well in a loser-pays scenario.
Or to turn your example around: If the car hasn't killed me and I just want my money back, should I be forced to just eat the loss because even if I win, the legal costs will be higher?
>Patent trolls are one of the things that would work significantly less well in a loser-pays scenario.
I'm not sure how that would matter. The patent troll sues 100 companies. Has to pay the legal fees for the 100 processes because all of them have been initiated by the patent troll. The patent troll wins 30 cases.
In the American system the patent troll already included the legal fees in his calculations and optimized them for profit but the victims are always stuck with legal fees even if they win. The patent troll basically causes a minimum amount of damage regardless of the outcome. The legal fees are often close to $0 for the patent troll because merely the act of receiving a letter from a lawyer scares startups into paying the settlement fees. Losing a month or two can be devastating for a young company but they can easily recover from losing $20k if it means that they can run their business with no distractions.
In the loser pays scenario the patent troll's legal fees would be completely unpredictable in the 70 cases. Losing 70 times might result in bankruptcy of the patent troll and the majority of victims would not be burdened by legal fees.
This sub thread is making the assumption that the innocent legal entities (= person or company) are on the losing end but if patent trolls had to be 100% sure that their patents are valid then there would be significantly fewer of them. For the few patent trolls that remain you can't argue that they shouldn't have the right to protect their patents. The patent system might be broken but if you can't enforce patents in valid situations then why even bother with the system?
What GM argues is reasonable could be many millions of dollars -- they could be liable for hundreds of millions of dollars depending on the severity. A judge isn't going to make them work with just 2 associates.
Your first question ("Should someone be able to...") is a false dichotomy. The real question is whether we show a preference for being able to sue easily, versus adding more downside.
In America, consumer protection is done through lawsuits, especially since the current leadership is underfunding these groups. In general, companies have less approvals before launching a product under the assumption that negligence will cost them a ton of money in class action. That is why class action amounts can be so high - it's the dis-incentive for cutting corners.
Yes, patent trolls are an issue. I think there are better ways to reduce that impact (such as a sensible patent system) without harming consumers.
With our existing system, you have to ask the same question every time you sue anybody, or do something that might cause somebody else to sue you, because you can get financially ruined even if you win.
No, it does not, its exactly the other way around. English Rule protects the innocent, who did not commit a crime, as they'll eventually win the case.
American Rule protects the rich (and those in power, such as police, public prosecutor, etc), as it allows them to bully the poor who can't afford a lawyer, or lose so much money that their interests are harmed. A clear example of that is patent trolls.
The rich can afford in either system, but the poor can only afford in English Rule. It should not be about poor vs rich but about truth (ie. guilty vs innocent).
How does loser-pays protect the poor? As noted above, unless you have significant resources, bringing suit against a large corporate entity is extremely risky, as you could get stuck paying for their army of lawyers, paralegals, and investigators.
In the US system, a poor person can bring suit, using a lawyer working on contingency, and not fear for being stuck should they lose.
Your argument seems to hinge on the "correct" party always winning, but that's far from the case.
With loser pays, bringing a suit is risky (with the risk depending on the risk of losing the suit).
With the US system, there is no way to get justice in many cases, even when you're obviously right, because the (non-recoverable) legal costs exceed the amount by which you have been wronged (and the opponent knows that).
This is IMO part of the problem with common law: the judge rarely inquires into matters before them, instead relying on arguments presented by lawyers, so the party which can afford better lawyers tends to win.
In continental law, judges role is more like an investigator; his/hers role is to establish the facts of the case and to apply the provisions of the code. They are the ones questioning witnesses.
If you can't afford an attorney, you can get one appointed, it is like that in every system AFAIK.
> Your argument seems to hinge on the "correct" party always winning, but that's far from the case.
Of course it does.
If the correct party does not usually win (with a few exceptions, being rounding errors) then your legal system, and democracy, is indeed very much broken.
If the police bust someone for murder, and this person gets sued, gets a fair trial, and gets incarcerated in jail for murder we, civilians/voters, must be able to assume that the system worked correctly. If this is not the case, if it is "normal" (too high percentage) innocent people get behind bars, that is a high priority problem. There's always going to be false positives, sure, but in general we must be able to assume one is a true positive.
Now, in English law the poor could sue, and win, if they're in the right. In American law, they can't afford a lawsuit. If they get sued for whatever, they'll be more likely to settle, without being on the good end of the stick. I can only define that as class justice.
There are limits to the claims, btw [1] [2]. Also, the amounts have to be reasonable.
Also, I believe @xyzal is correct in describing the difference between civil and common law. The problem you described is much less of a problem in civil law.
If you can't afford an attorney, you can get one appointed,
In the US, that only applies to indigent defendants in criminal cases. It does not apply to anybody with any semblance of financial stability and does not apply to anybody in civil cases.
I used to work in litigation support and something that stuck in my mind was an article some years ago in a trade magazine about how a new trend in venture capital from the UK was funding American lawsuits.
I always think of that when someone is sneering at the American legal system or blaming Americans for everything they interact with globally.
> In continental Europe, the "loser pays" principle seems to hold quite well, while also having the benefit of discouraging people from frivolous lawsuits.
You'd think the people who came up with it had never played Scrabble, where you lose a turn for a false dictionary challenge.
